SAAS Increasingly Popular Among Small Businesses, Survey Finds

Companies like Microsoft and IBM, which provide a convergence of on-premises and SAAS, are clearing concerns for interested SMBs trying to maximize cloud and on-premises issues.

According to IT research firm AMI's latest worldwide SMB Cloud Services Practice, there are roughly 750,000 (12 percent) small businesses and 20,000 (24 percent) medium-size businesses already using software as a service (SAAS). In addition, the survey found by looking at today's SAAS users, 78 percent of small businesses and 31 percent of midsize businesses are leveraging a SAAS plus on-premises mix (or hybrid model), while approximately only a third of SAAS users are using an actual pure-SAAS product.
With an anticipated growth of up to $95 billion in global SMB cloud-related spending by 2014, the firm said it isn't a surprise to see over half of U.S. SMBs looking into SAAS as a potential solution. Approximately one in five U.S. SMBs plan to use SAAS. However, AMI said it believes that SMBs are easing into the concept of local plus cloud-based computing rather than leapfrogging into a pure-play platform.
"Though cloud computing is seen as the next IT platform, the consideration of SAAS amongst SMBs as the next favorable cost-saving model is expedited by the macro situation we are in today," said AMI Senior Associate Yedda Chew. "Almost two years since the downturn began, we still see 77 percent of U.S. small businesses (1-99 employees) and 84 percent of U.S. medium businesses (100+ employees) very concerned with current market conditions. This marks a 31 percent and 81 percent year-over-year increase, respectively."
AMI's research concluded that certain applications would accelerate the need for on demand/cloud among SMBs from SAAS plus on-premises vendors, including e-mail and messaging applications, online storage and backup, and document management and collaboration solutions. Approximately 134,000 non-SAAS U.S. SMB users plan to adopt this application, according to the company's report, which is good news for companies like Microsoft, which not only provides hosted solutions like Exchange Online in its BPOS bundle, but also its ubiquitous "Exchange On Premises."
Approximately, 129,000 non-SAAS U.S. SMB users plan to adopt online storage and backup solutions, which AMI said should allow companies like Seagate/i365 to provide a local- and cloud-based disaster recovery backup for SMBs. According to survey results, more than 125,000 U.S. SMBs are looking for document management and collaboration solutions tools and to companies like Microsoft and its SharePoint solution, or Yousendit.
"Now, as the budgeting season is just around the corner for most SMBs, economic headwinds are once again forcing businesses to re-evaluate a scalable strategy using IT. This said, companies such as Microsoft, SAP AG and IBM have a leg up with mixed local and cloud-integrated solutions," Chew said. "These companies are enjoying the SAAS tailwind, and it will be these companies with their hybrid model, which have a better chance of breaking down the barriers of the potential 5.7 million non-SAAS U.S. SMB users."
SMB preferences for cloud-based application bundles, their price sensitivity and purchase channel preferences were further explored in AMI's upcoming Worldwide SMB Cloud Services Study, the company noted. The study provides coverage of platforms and devices, IT infrastructure services, business productivity applications, business management/line-of-business applications and unified communications. Research will be available later in 2010, according to AMI's Website.